Pending U.S. East and Gulf Coast Ports Strike: Updates
Following last October’s three-day strike, the International Longshoremen’s Association (ILA) and the United States Maritime Alliance (USMX) are heading back to the bargaining table. If an agreement is not reached, a second strike is set to begin on January 15, which would impact mobility logistics and cost. The key issue is around automation.
Catch Up
Last fall, contract labor negotiations over wage increases, automation usage, and benefits between the ILA and the USMX stalled, and on October 1, more than 45,000 dockworkers across 36 ports from Maine to Texas went on strike. These East and Gulf Coast ports typically handle more than 60% of all containerized goods touching the U.S.
On October 3, an agreement was reached for a wage increase and to extend the current master contract through January 15, to allow time to return to the bargaining table and negotiate outstanding issues. Thankfully, the strike impact was not as severe as predicted with minimal disruption felt, likely due to advance preparations.
Bargaining resumed on January 7 over outstanding automation issues. Altair’s Supplier Partner Experience team is closely monitoring the situation. Below, find the latest news and potential impacts to mobility programs.
If a Second Strike Happens: What You Need To Know
- Each strike day is expected to extend shipment transit time by approximately five days.
- The impact would be felt through shipping delays, higher freight prices, and surcharges. Cost estimates to the U.S. economy are in the billions per day.
- Some ocean carriers are noting surcharges will begin shortly after the strike date (more on this below).
Opposing Positions
- The ILA cites national security risks with automated port systems vulnerabilities as well as a concern over lost union jobs because of increased automation.
- The USMX insists that port modernization is necessary and will allow terminals to improve efficiency and handle more cargo, which will create more jobs, better safety standards, and higher wages.
Ocean Carrier Preparations
- Maersk has alerted their customers to pick up and/or return containers at affected ports prior to January 15th.
- The German ocean carrier Hapag-Lloyd announced surcharges effective January 20th in the event the strike goes forward.
-
- Work Disruption Surcharge (WDS): $850 per 20-foot container and $1,700 per 40-foot container. The surcharge covers imports from all ports in North Europe, the Mediterranean, Africa, the Middle East, the Indian Subcontinent, Oceania, and Latin America to the U.S. East and Gulf Coast ports.
-
- Work Interruption Destination Surcharge (WIDS): The same fee structure as the WDS and applies to imports from all ports in East Asia-Japan, South Korea, Taiwan, Hong Kong, China, Macau, Vietnam, Laos, Cambodia, Thailand, Myanmar, Malaysia, Singapore, Brunei, Indonesia, and the Philippines to the U.S. East and Gulf Coast ports.
-
- Surcharges will be waived if no disruptions take place.
-
- Surcharges do not apply to containers already on the water or in terminals before January 20th.
- We expect other ocean carriers to also implement strike surcharges and will advise once these are published.
Altair Continues to Manage and Monitor the Situation
Altair will continue to monitor this evolving situation and provide updates (including potential transit delays, impact on current and pending household goods shipments, and additional costs) as they become available. We are actively working with our network of supplier partners to determine the best course of action for each potentially impacted shipment.
Update January 9: Strike Averted
The ILA and USMX issued a joint statement late Wednesday announcing they had reached a tentative agreement, subject to ratification, on a new six-year master contract.
A compromise was reached over the issue of automation. Agreement details have not yet been publicly disclosed, but sources reveal that the terminal operators and ocean carriers will get broader rights to introduce semi-automated equipment to improve efficiencies, while the union receive guarantees for new jobs linked to each piece of equipment.
Full details of the tentative agreement will be announced once the final negotiation and ratification has been completed.
Please reach out to your Altair Global representative or contact us at [email protected] with any questions.
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Following last October’s three-day strike, the International Longshoremen’s Association (ILA) and the United States Maritime Alliance (USMX) are heading back to the bargaining table. If an agreement is not reached, a second strike is set to begin on January 15, which would impact mobility logistics and cost. The key issue is around automation.
Catch Up
Last fall, contract labor negotiations over wage increases, automation usage, and benefits between the ILA and the USMX stalled, and on October 1, more than 45,000 dockworkers across 36 ports from Maine to Texas went on strike. These East and Gulf Coast ports typically handle more than 60% of all containerized goods touching the U.S.
On October 3, an agreement was reached for a wage increase and to extend the current master contract through January 15, to allow time to return to the bargaining table and negotiate outstanding issues. Thankfully, the strike impact was not as severe as predicted with minimal disruption felt, likely due to advance preparations.
Bargaining resumed on January 7 over outstanding automation issues. Altair’s Supplier Partner Experience team is closely monitoring the situation. Below, find the latest news and potential impacts to mobility programs.
If a Second Strike Happens: What You Need To Know
- Each strike day is expected to extend shipment transit time by approximately five days.
- The impact would be felt through shipping delays, higher freight prices, and surcharges. Cost estimates to the U.S. economy are in the billions per day.
- Some ocean carriers are noting surcharges will begin shortly after the strike date (more on this below).
Opposing Positions
- The ILA cites national security risks with automated port systems vulnerabilities as well as a concern over lost union jobs because of increased automation.
- The USMX insists that port modernization is necessary and will allow terminals to improve efficiency and handle more cargo, which will create more jobs, better safety standards, and higher wages.
Ocean Carrier Preparations
- Maersk has alerted their customers to pick up and/or return containers at affected ports prior to January 15th.
- The German ocean carrier Hapag-Lloyd announced surcharges effective January 20th in the event the strike goes forward.
-
- Work Disruption Surcharge (WDS): $850 per 20-foot container and $1,700 per 40-foot container. The surcharge covers imports from all ports in North Europe, the Mediterranean, Africa, the Middle East, the Indian Subcontinent, Oceania, and Latin America to the U.S. East and Gulf Coast ports.
-
- Work Interruption Destination Surcharge (WIDS): The same fee structure as the WDS and applies to imports from all ports in East Asia-Japan, South Korea, Taiwan, Hong Kong, China, Macau, Vietnam, Laos, Cambodia, Thailand, Myanmar, Malaysia, Singapore, Brunei, Indonesia, and the Philippines to the U.S. East and Gulf Coast ports.
-
- Surcharges will be waived if no disruptions take place.
-
- Surcharges do not apply to containers already on the water or in terminals before January 20th.
- We expect other ocean carriers to also implement strike surcharges and will advise once these are published.
Altair Continues to Manage and Monitor the Situation
Altair will continue to monitor this evolving situation and provide updates (including potential transit delays, impact on current and pending household goods shipments, and additional costs) as they become available. We are actively working with our network of supplier partners to determine the best course of action for each potentially impacted shipment.
Update January 9: Strike Averted
The ILA and USMX issued a joint statement late Wednesday announcing they had reached a tentative agreement, subject to ratification, on a new six-year master contract.
A compromise was reached over the issue of automation. Agreement details have not yet been publicly disclosed, but sources reveal that the terminal operators and ocean carriers will get broader rights to introduce semi-automated equipment to improve efficiencies, while the union receive guarantees for new jobs linked to each piece of equipment.
Full details of the tentative agreement will be announced once the final negotiation and ratification has been completed.
Please reach out to your Altair Global representative or contact us at [email protected] with any questions.
